Source: Thinkstock
Transocean Partners was formed two years ago after activist investor Carl Icahn had put pressure on Transocean for a special cash dividend of $4 a share. Shareholders rejected that proposal in 2013 but did put an Icahn representative on its board and lifted its annual dividend from $2.24 to $3.00 at the 2014 shareholders meeting.
Unitholders of Transocean Partners must approve the transaction. Transocean will vote its 50.1% stake in favor of the deal, leaving a total of 9.9% from other shareholders in order to meet the necessary votes to go forward. Transocean expects the transaction to be completed in the fourth quarter of this year and “to generally be non-taxable to Transocean Partners common unitholders.”
Transocean CEO Jeremy Thigpen said:
We are excited about this merger, as it provides significant and immediate benefits to Transocean in the form of simplified administration and governance, tangible cost savings and improved liquidity. The contemplated all-equity transaction is entirely consistent with Transocean`s current liquidity objectives.
Kathleen McAllister, CEO of Transocean Partners added:
Transocean Partners common unitholders will benefit from a premium to the current unit price and receive shares in an entity with significant financial flexibility, a demonstrated access to capital and meaningfully improved market liquidity of its shares. Additionally, we expect that common unitholders will also benefit from Transocean’s significantly larger and more diverse fleet and its industry-leading contract backlog.
Common units in Transocean Partners traded up about 9.4% Monday morning, at $11.95 in a 52-week range of $5.89 to $13.35.
Transocean’s stock traded down about 6%, at $10.30 in a 52-week range of $7.67 to $17.19. The stock’s 12-month price target is $9.19.
Essential Tips for Investing: Sponsored
A financial advisor can help you understand the advantages and disadvantages of investment properties. Finding a qualified financial advisor doesn’t have to be hard. SmartAsset’s free tool matches you with up to three financial advisors who serve your area, and you can interview your advisor matches at no cost to decide which one is right for you. If you’re ready to find an advisor who can help you achieve your financial goals, get started now.
Investing in real estate can diversify your portfolio. But expanding your horizons may add additional costs. If you’re an investor looking to minimize expenses, consider checking out online brokerages. They often offer low investment fees, helping you maximize your profit.
Thank you for reading! Have some feedback for us?
Contact the 24/7 Wall St. editorial team.
Editors' Picks
